Cielo (BOVESPA:CIEL3) - Share price, News & Analysis

CIEL3 fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	2/6
Past Performance	2/6
Financial Health	5/6
Dividends	0/6

CIEL3 Stock Overview

Cielo S.A., through its subsidiaries, provides payment services in Brazil.

Rewards

Trading at 47.9% below our estimate of its fair value

Earnings are forecast to grow 12.59% per year

Risk Analysis

High level of non-cash earnings

Cielo Competitors

Getnet Adquirência e Serviços para Meios de Pagamento

BOVESPA:GETT3

R$4.2b

PayPal Holdings

NasdaqGS:PYPL

US$91.1b

Itaú Unibanco Holding

BOVESPA:ITUB4

R$237.0b

Adyen

ENXTAM:ADYEN

€42.6b

Price History & Performance

Summary of all time highs, changes and price drops for Cielo
Historical stock prices
Current Share Price	R$3.65
52 Week High	R$4.45
52 Week Low	R$1.99
Beta	0.99
1 Month Change	6.11%
3 Month Change	40.39%
1 Year Change	-10.76%
3 Year Change	-48.30%
5 Year Change	-84.54%
Change since IPO	-56.67%

Recent News & Updates

May 10

Cielo's (BVMF:CIEL3) Earnings Are Of Questionable Quality

Cielo S.A.'s ( BVMF:CIEL3 ) robust earnings report didn't manage to move the market for its stock. Our analysis...

Apr 23

Cielo's (BVMF:CIEL3) Returns On Capital Tell Us There Is Reason To Feel Uneasy

What financial metrics can indicate to us that a company is maturing or even in decline? A business that's potentially...

Shareholder Returns

	CIEL3	BR IT	BR Market
7D	8.0%	10.3%	0.04%
1Y	-10.8%	-45.9%	-19.7%

Return vs Industry: CIEL3 exceeded the BR IT industry which returned -44.9% over the past year.

Return vs Market: CIEL3 exceeded the BR Market which returned -19.1% over the past year.

Price Volatility

Is CIEL3's price volatile compared to industry and market?
CIEL3 volatility
CIEL3 Average Weekly Movement	7.6%
IT Industry Average Movement	6.7%
Market Average Movement	6.3%
10% most volatile stocks in BR Market	9.9%
10% least volatile stocks in BR Market	3.0%

Stable Share Price: CIEL3 is not significantly more volatile than the rest of BR stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: CIEL3's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1995	4,106	Gustavo Henrique De Sousa	https://www.cielo.com.br

Cielo S.A., through its subsidiaries, provides payment services in Brazil. It is involved in the provision of services related to credit and debit cards, and other payment methods, including signing up of merchants and service providers; rental, installation, and maintenance of point of sale terminals; and data capture and processing of electronic and manual transactions. The company also offers services related to the processing means of payments that involve cards, maintenance services, and contacts with merchants for acceptance of credit and debit cards; data transmission services to load fixed or mobile phone credits, prepaid transportation, and mobile payment; software development and licensing of computer software; electronic transactions processing; IT services for collection and management of accounts payable and receivable through the Internet; and data processing services and support services to medical companies.

Cielo Fundamentals Summary

How do Cielo's earnings and revenue compare to its market cap?
CIEL3 fundamental statistics
Market Cap	R$9.87b
Earnings (TTM)	R$922.95m
Revenue (TTM)	R$11.73b

10.7x

P/E Ratio

0.8x

P/S Ratio

Is CIEL3 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CIEL3 income statement (TTM)
Revenue	R$11.73b
Cost of Revenue	R$8.11b
Gross Profit	R$3.62b
Other Expenses	R$2.70b
Earnings	R$922.95m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 02, 2022

Earnings per share (EPS)	0.34
Gross Margin	30.87%
Net Profit Margin	7.87%
Debt/Equity Ratio	43.6%

How did CIEL3 perform over the long term?

See historical performance and comparison

Valuation

Is Cielo undervalued compared to its fair value and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

47.9%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: CIEL3 (R$3.65) is trading below our estimate of fair value (R$7.01)

Significantly Below Fair Value: CIEL3 is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: CIEL3 is poor value based on its Price-To-Earnings Ratio (10.7x) compared to the South American IT industry average (10.1x).

PE vs Market: CIEL3 is poor value based on its Price-To-Earnings Ratio (10.7x) compared to the BR market (9x).

Price to Earnings Growth Ratio

PEG Ratio: CIEL3 is good value based on its PEG Ratio (0.8x)

Price to Book Ratio

PB vs Industry: CIEL3 is good value based on its Price-To-Book Ratio (1x) compared to the XS IT industry average (1.6x).

Future Growth

How is Cielo forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

12.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: CIEL3's forecast earnings growth (12.6% per year) is above the savings rate (9.1%).

Earnings vs Market: CIEL3's earnings (12.6% per year) are forecast to grow faster than the BR market (6% per year).

High Growth Earnings: CIEL3's earnings are forecast to grow, but not significantly.

Revenue vs Market: CIEL3's revenue (4.1% per year) is forecast to grow slower than the BR market (6.1% per year).

High Growth Revenue: CIEL3's revenue (4.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: CIEL3's Return on Equity is forecast to be low in 3 years time (8.9%).

Past Performance

How has Cielo performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-38.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CIEL3 has a high level of non-cash earnings.

Growing Profit Margin: CIEL3's current net profit margins (7.9%) are higher than last year (5%).

Past Earnings Growth Analysis

Earnings Trend: CIEL3's earnings have declined by 38.8% per year over the past 5 years.

Accelerating Growth: CIEL3's earnings growth over the past year (66.1%) exceeds its 5-year average (-38.8% per year).

Earnings vs Industry: CIEL3 earnings growth over the past year (66.1%) underperformed the IT industry 93.4%.

Return on Equity

High ROE: CIEL3's Return on Equity (8.5%) is considered low.

Financial Health

How is Cielo's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CIEL3's short term assets (R$85.7B) exceed its short term liabilities (R$72.9B).

Long Term Liabilities: CIEL3's short term assets (R$85.7B) exceed its long term liabilities (R$13.0B).

Debt to Equity History and Analysis

Debt Level: CIEL3's net debt to equity ratio (19.5%) is considered satisfactory.

Reducing Debt: CIEL3's debt to equity ratio has reduced from 78.1% to 43.6% over the past 5 years.

Debt Coverage: CIEL3's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: CIEL3's interest payments on its debt are well covered by EBIT (3.4x coverage).

Balance Sheet

Dividend

What is Cielo current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

4.41%

Forecast Dividend Yield

Dividend Yield vs Market

Notable Dividend: Unable to evaluate CIEL3's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate CIEL3's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CIEL3's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CIEL3's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: CIEL3 is not paying a notable dividend for the BR market.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as CIEL3 has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.5yrs

Average management tenure

CEO

Gustavo Henrique De Sousa (43 yo)

3.17yrs

Tenure

Mr. Gustavo Henrique Santos De Sousa serves as the Chief Executive Officer at Cielo S.A. since May 19, 2021. He has been the Chief Financial and Investor Relations Officer at Cielo S.A. He served as Chief...

Leadership Team

Experienced Management: CIEL3's management team is considered experienced (2.5 years average tenure).

Board Members

Experienced Board: CIEL3's board of directors are considered experienced (3.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/24 00:00
End of Day Share Price	2022/05/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31